Co-operative Basics

How disappointing it was to hear that the Co-operative had withdrawn products containing horsemeat that had been on sale in their stores. At least in Britain, the history of the co-operative began as a response to food contamination in the new industrial cities, so it is particularly unacceptable for the shop to undermine standards for the sake of costs and competition. It was welcome that Peter Marks was the first boss of a food company to make himself publicly accountable, but, after their pioneering role in the areas of fair trade and trenchant opposition to food contamination, we expected better from the Co-operative and have been let down.

Part of the reason I am a member of my own Midcounties Co-operative is that I am expect them to adopt higher standards in terms of the way they treat their suppliers as well as their staff. As a business with members rather than shareholders the Co-operative is able to do this, even though being part of a competitive market puts pressure on its high standards. While corporates are legally bound to maximise value for shareholders, co-operatives are obliged to meet the standards required by their members.

This is one of many reasons why I have been involved in supporting co-operatives for the past decade, both through my own economic decisions and through undertaking research and publishing articles. I am now working as part of the Co-operative Commission set up by the Welsh Government. It has a wide remit: to find ways to strengthen the co-operative economy in Wales on the basis that a co-operative economy is more socially beneficial than a capitalist one. We will also be exploring the potential for taking mutual models into the realm of services currently provided by the public sector.

The Commission recently launched a call for evidence. What would be particularly useful is ways that political authorities in other countries have found ways to support the sector. Given that autonomy and self-help are guiding principles of the movement it is not always easy to see what role politicians can legitimately take, but many countries offer fiscal advantages to co-operatives on that basis that they achieve positive social outcomes. If you have examples of such policies please do respond to the call for evidence.
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Co-operation and the Wealth of Nations

John Restakis, Executive Director of the British Columbia Co-operative Association, is on a lecture tour of the UK as part of the events to celebrate Co-operatives Fortnight. His recent book, Humanizing the Economy, raises a number of useful questions in terms of how the co-operative form can offer solutions to the disastrous failure of the market. He is lecturing at the House of Commons tonight, Edinburgh on Wednesday and Rochdale on Thursday. His lecture is powerful and inspiring and well worth a trip.

For me, his most powerful question was why the democratisation which took hold of political systems in the 19th century did not also take hold of economic systems. The co-operative movement, of course, was one example of successful economic democratisation, but John's view that we need to focus on 'taking the democratic revolution beyond politics and into economics' demands attention from politicians of all colours who espouse the democratic vision.

The failure of economic democracy has led to the atrophy of political democracy, as corporations buy politicians: we are 'citizens in politics but subjects in the marketplace'. (This reveals John's North American outlook, since I fear that in Britain we are still formally subjects in both realms.) While we enjoy voting rights in our political systems, 'our economic systems are still stuck in the 18th century'. Challenging the ideology of free markets, he asks how can we claim to have free markets when firms are still stuck in the ideology of command and control?

So much for John Restakis's theory. In terms of practice he shared the powerful example of the co-operative economy of the Italian region of Emilia-Romagna, Italy's most productive region. The regional capital of Bologna has a dynamic economy, with one enterprise for every 10 inhabitants. Across the region as a whole, 40% of GDP is generated by co-operative enterprises, mainly of small and medium size. The construction, agriculture, food processing, transport and social care sectors are all dominated by co-operatives.

There is no attempt to enforce a co-operative monoculture, however, with a variety of different types of owner-managed and worker-managed firms thriving in a vibrant and diverse local economy. John draws an analogy between this and a healthy ecosystem, where a variety of different species co-exist without any dominating the others.

The success of the co-operative businesses in Emilia-Romagna has spilled over into the wider economy bringing about what John referred to as 'the socialisation of capital'. There are high average pay rates, low levels of inequality, high levels of female employment. Co-operation has led to economic dynamism, with Bologna figuring 10th in the list of Europe's economic regions in terms of its productivity.

In conclusion, John Restakis offered a challenge to the movement as a whole to have more self-confidence in celebrating its successes. But beyond this there needs to be a development of co-operative theory and a willingness to argue politically and theoretically for co-operation as a more successful and more innovative form of economic life, as well as having the social and community advantages that it has long been known for.
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Big Society or Big Profits?

In patronising mediaspeak we are to be told again today that the PM is failing to communicate effectively his vision for the Big Society. While he may be failing in the sense that we, who must be the big society if anybody is, are not following his line of argument, he is not failing in the sense that we are well aware what he is up to. A ComRes poll reported in yesterday's Sunday Independent indicated that 41% of people considered that 'The Government’s Big Society is merely a cover for spending cuts' with only 21% disagreeing, while half of those surveyed thought it was just a gimmick.

Those of us who work in and with co-operatives have long been suspicious of the government's support for social enterprise. Initially, co-operatives were not included in the definition of a 'social enterprise' because they were considered to be motivated by the interests of their members rather than wider society. The definition of a social enterprise is so notoriously vague - involving merely a commitment to the social good and some minimum level of trading - that major global corporations were claiming to be social enterprises while ethically driven businesses owned by their own members could not.

What is important, and can cut like a sharp scalpel straight through the tendentious guff, is the simple issue of ownership and control. A co-operative is a different form of business because it is owned by either its workers, or its customers, or some combination of the two. The value of its business stays with them. And decisions about how the business should work also rest with the workers or members, either directly or - when the co-operatives reach a certain size - through elected boards.

The difficulty co-operatives, and social enterprises, have faced in a capitalist economy is persuading those who control capital to lend them the small amount they need to develop and expand. Overseas co-operative movements have identified this weakness and become effective at recycling their members money, as in the Quebecois solidarity funds, or the Caja Laboral in Spain. The putative Big Society Bank, by contrast, is a capitalist institution, where external holders of capital can make profits from the work of others. The contrast between this the co-operative approach is clear when the discussion moves seamlessly on to a Big Society Stock Exchange, indicating that ownership, too, will be vested not in those who create value in the business but in those who merely trade in its shares.

The important political question is why, when it is the private sector that has demonstrated itself to be socially destructive and ethically irresponsible, is the government focusing attention on 'reform' of the public sector. A policy to facilitate the transition of businesses into co-operatives might be a much more effective way of enlarging society, while simultaneously making 'business' more responsible for social need.

And while this is a highly unlikely policy to emerge from either a Labour or a Tory government (although it would be high up the agenda of a Green one), we should content ourselves with supporting and most importantly joining the co-operatives that already exist. While the media is focusing attention on the People's Supermarket, the efforts of this struggling, individual shop in central London are quite unnecessary. We already have a people's supermarket: it's called the Co-operative.
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'Generation Crunch'

This is a desperate time to be young. The pressure to consume, to conform, to achieve impossible educational feats sucks the joy and freedom out of youth. And what was all the effort for, when statistics demonstrate that the employment situation facing our young people is worse than it has been for several generations. Nearly 1 million UK citizens under the age of 25 are out of work, a full 20.3%. This represents the highest figure since record began in 1992.

The graphic shows the trend for economic inactivity amongst 16-24-year-olds between 1993 and 2010 - a relentlessly upward trend that shows a doubling in the rate of inactivity in this age-group from 6% to 12% over the period.

Rather than indulging in gloom over statistics, the Co-operative Group commissioned London-based think-tank Demos to investigate who these young people are and how they perceive the situation they have been handed. The resulting report - Back to the Future - and the short film of the focus group participants offers considerable cheer. They are thoughtful, sincere and well-informed.

The outcome of the consultation is a call for a transfer of 'political capital' towards young people. The events were held in the week before the spending cuts were announced, yet none of the people there had been able to vote since they were 16 and 17. A lowering of the voting age to 16 is a long-overdue reform that was overlooked during the clamour for reform prior to the election.

Perhaps a more practical - and achievable - suggestion would be the transfer of assets, particularly in the form of land, to enable young people to take control of their lives. Proposals such as those for community self-build, if combined with appropriate sustainability and local provisioning targets, could enable the 'generation crunch' to become the ecological citizens who will create our sustainable future.
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Ten Ways to Challenge Capitalism That Wouldn't Frighten Your Grandmother

It appears that the salesmen of capitalism have not been entirely successful. Despite the many years of propaganda we have not abandoned care for our fellow man or woman. We still overwhelmingly support a health service paid for from taxation and would rather a decent pension for all was organized along the same lines than be left to the wolves of the financial markets.

Money is at the heart of the economic system that is not called 'capitalism' by accident, and this is the place where you can begin to extract your own life from that destructive and damaging system. It has also been most conspicuously displaying the tendency towards inequality that is the beating heart of capitalism in the past year.

Below I list some further ideas for challenging capitalism in your everyday life in practical ways. It is important not to be daunted and to maintain your awareness that, as you extract your energy and money, along with millions of others, you are weakening the system. From my perspective everyday actions against capitalism, aside from being less risky and more morally acceptable, are far more threatening than violent revolution.

Those who oppose capitalism have the advantages of creativity and imagination, as well as mutual support. It will always be impractical to oppose capitalism by taking on the state with violence, since the state will always be far better equipped in that department than we are. Such action will actually give energy to the growth dynamic, through policing and medical care of the injured, not to mention sales of weaponry.

So here are ten ideas in domestic subversion. Start today and within a year you can be in the clear for a large part of your daily life.

1. Arrange to buy your vegetables through the nearest organic box scheme
2. Switch all your bank accounts to the Nationwide or Co-op/Smile Bank
3. Shop at the Cooperativebetter still, join your local coop.
4. If you work in the private sector, cut your hours of work at least by half
5. Cook more at home, for yourself and your friends
6. Don’t vote, unless the party you vote for has stated anti-capitalist economic policies
7. Whenever you are talking to somebody involved in business, ask them if their business is a cooperative, and have something to back yourself up if they ask why you asked this question
8. Get an allotment
9. Cut down on your coffee intake, and make sure that what you do buy has been fairly traded
10. Before you buy anything ask yourself how much you know about who made it and how, and move towards products where you have more information and closer ties Tweet

Reasons to be Co-operative

Along with the other supermarkets John Lewis announced its record profits earlier this month, up from £250m. to £300m. But there is one big difference. Because of JL’s mutual ownership structure the profit will either be reinvested in the firm or paid out to employees in bonuses. Employees are actually known as ‘partners’ in the company and they will be paid an average of £2,000 on top of their salaries. As part of the group, Waitrose employees will benefit from this pay-out: a supermarket assistant earning £12.5K will get an extra £2,000.

John Lewis has a considerably smaller turnover than Tesco, and lower profits to match. But more important is the fact that Tesco’s profits will be paid to shareholders rather than employees, which helps explain why Tesco’s shares have increased in value by 25% over the past year. The basic justice of the situation at John Lewis compared to Tesco is so apparent that it barely seems stating: it is the employees who generate the surplus and so it is rightfully theirs.

In my world it seems obvious that, if employees know they will benefit from the success of the business they work for, they are likely to work harder. In the world of capitalist economics, though, co-operation is supposed to operate as a disincentive. It is cut-throat competition that yields efficiency. But if this were the case we would expect to see businesses like Waitrose failing, whereas in fact they are going from strength to strength.

A recent opinion poll asking about ethical brands reported in the FT shows that British consumeres do make the link between co-operatives and ethical consumption: 'UK shoppers emerged as the most aware, most critical and most likely to see national brands such as Co-op, the financial and retail group, or Innocent, the smoothie drinks brand, as standard-bearers.' Of the top 15 brands four are co-operatives.

As individuals playing our part in the economy we may be fortunate enough to work for a co-operative, or to be able to influence the movement of our place of work into co-operative ownership, or to start a co-operative business. If these options are not available we can at least choose to shop at a co-operative supermarket—Waitrose or the Co-operative—and use mutual banks and building societies—the largest being the Nationwide.This is much more than a token gesture. If we want to live by Gandhi’s maxim that we should ‘be the change we want to see in the world’, then if you want to see a just and co-operative world it is just common sense.

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